Search

CVS Health has appointed David Joyner as its new CEO, replacing Karen Lynch, as the company anticipates third-quarter earnings to fall below expectations. Joyner, who has been with CVS for a significant portion of his career, will face the challenge of improving the performance of the Aetna health-insurance business and addressing regulatory scrutiny. The company's financial difficulties have been attributed to issues with Aetna's Medicare plans, leading to a decline in share price and the need for strategic changes. CVS aims to enhance its healthcare offerings and streamline operations under Joyner's leadership. [Extracted from the article]

Elevance Health experienced a significant decrease in shares after reporting adjusted earnings below analysts' projections, primarily due to challenges in its Medicaid business. The company cited an "unprecedented challenge" in Medicaid, with healthcare costs running three to five times higher than usual. Elevance expects these issues to persist into the next year, impacting its earnings growth and highlighting the broader concerns over rising healthcare costs in the insurance industry. [Extracted from the article]

UnitedHealth's 2025 earnings are projected to fall short of expectations, causing a 10% drop in its shares and impacting other companies in the sector. The company cited factors such as federal payment changes, Medicare drug benefit redesign, and higher-than-expected use of specialty drugs for the projected shortfall. Despite these challenges, UnitedHealth remains committed to Medicare and expects growth in the future. [Extracted from the article]

The article discusses significant changes to Medicare plans for 2025, affecting approximately five million people who may need to switch plans. Insurers are adjusting coverage, potentially leading to increased costs and reduced benefits for seniors. It is advised that individuals carefully review plan details, particularly regarding out-of-pocket costs, drug benefits, and network coverage, to make informed decisions during the open-enrollment period. Various resources are available to provide unbiased advice and assistance in navigating these changes. [Extracted from the article]

Humana's shares dropped more than 10% after the health insurer warned that a significant decrease in the federal government's quality ratings of its Medicare plans could impact its results in 2026. The company currently has about 25% of its members enrolled in plans rated four stars and above for 2025, down from 94% this year. The downgrade in ratings could have a substantial revenue impact in 2026, with estimates ranging from less than $2 billion to higher figures. Humana is appealing the CMS decisions and is working to mitigate their impact. The Medicare business has become riskier and more challenging for insurers, and decisions by agencies and Congress can have a significant impact on companies' results. Humana's close focus on the Medicare business makes it particularly vulnerable to government moves. The exact impact of the quality rating decline on Humana's profits is unclear, but analysts believe it will likely hurt the company's efforts to bolster its margins. Humana is exploring all available options to mitigate the revenue headwind related to the quality ratings if its challenges are unsuccessful. The company does not expect this issue to affect its financial results or outlook for 2024 or 2025. [Extracted from the article]

Cigna's Express Scripts, one of the largest pharmacy-benefit managers in the US, has sued the Federal Trade Commission (FTC) and demanded a retraction of a report critical of the companies that negotiate drug spending. The lawsuit claims that the report is unsupported and accuses FTC Chair Lina Khan of bias against the industry. The conflict between the FTC and pharmacy-benefit managers has escalated, with the FTC reportedly preparing to sue the largest PBMs over their pricing negotiation tactics. The FTC stands by its study, stating that it aims to help the public and policymakers understand the complex and opaque drug market. [Extracted from the article]

NewYork-Presbyterian Hospital System demanded $25 million from the 32BJ Health Fund to stay out of its health insurance plan. The union fund wanted to exclude NewYork-Presbyterian from its network due to high prices, but Aetna, the insurer, required a signoff from the hospital system to omit it. The hospital system argued that the union fund owed it $25 million for past medical services. As a result, the union fund abandoned Aetna and stuck with Anthem to avoid NewYork-Presbyterian. [Extracted from the article]

CVS Health's Medicare business has negatively impacted the company's first-quarter earnings, leading to a decrease in its guidance for 2024. The company's Medicare costs have risen faster than expected, causing a significant drop in CVS shares. CVS CEO Karen Lynch has invested heavily in the Medicare business, but the company is taking action to mitigate the issues and expects to reach its target profitability in three to four years. The Medicare woes faced by CVS reflect broader challenges in the insurance industry, with competitor Humana also experiencing earnings difficulties. [Extracted from the article]

Major U.S. health insurers, including CVS Health, Elevance Health, and Kaiser Permanente, have agreed to cover the anti-obesity drug Wegovy for certain Medicare beneficiaries with heart-related conditions. This decision comes after new guidance from the Centers for Medicare and Medicaid Services, which allows Part D plans to cover anti-obesity medications if they receive approval for an additional use. The coverage change will alleviate the financial burden on individuals who were previously paying out of pocket for the drug, but it may also result in billions of dollars in additional drug spending for insurers. [Extracted from the article]

A Johnson & Johnson employee has filed a lawsuit accusing the company of mismanaging its workers' prescription-drug benefits. The lawsuit alleges that J&J did not make enough effort to secure good deals for its employees on prescription drugs, resulting in overpayment for some generic drugs. The lawsuit seeks compensation for the alleged losses to the employees' health plan but does not specify an amount. This lawsuit is part of a larger battle over transparency and cost in the management of employers' health and drug benefits, and it is one of the first of its kind to be filed. [Extracted from the article]

A Johnson & Johnson employee has filed a lawsuit accusing the company of mismanaging its workers' prescription-drug benefits. The lawsuit alleges that J&J did not make enough effort to secure good deals for its employees on prescription drugs, resulting in overpayment for some generic drugs. The lawsuit seeks compensation for the alleged losses to the employees' health plan but does not specify an amount. This lawsuit is part of a larger battle over transparency and cost in the management of employers' health and drug benefits, and it is one of the first of its kind to be filed. [Extracted from the article]

Cigna has agreed to sell its Medicare business to Health Care Service Corp. (HCSC) for $3.3 billion. The deal includes Cigna's Medicare Advantage, Medicare supplement, and Medicare drug plans, as well as a unit called CareAllies. The transaction is expected to close in early 2025 pending approval from antitrust authorities and regulators. The sale leaves Cigna without a presence in a sector that has been a major growth engine for the health insurance industry. HCSC, the parent company of Blue Cross Blue Shield plans in five states, sees the deal as a significant expansion opportunity. [Extracted from the article]

Humana, a health insurance company that focuses on Medicare plans, reported a significant loss for the fourth quarter and projected ongoing financial difficulties for the next year. The company attributed the losses to higher-than-expected medical costs, particularly due to increased use of inpatient hospital services among seniors. This announcement is expected to impact the entire health insurance sector. Humana executives suggested that the industry may need to raise prices or reduce benefits to improve margins, potentially leading to a decline in membership. The company also cited regulatory changes and the failure of acquisition talks with Cigna Group as additional challenges. [Extracted from the article]

Cigna, a major insurance company, is in talks to sell its Medicare business to Health Care Service Corp. for between $3 billion and $4 billion. This potential deal would allow Health Care Service Corp. to expand its reach and gain a significant Medicare business. Cigna had been expanding its Medicare Advantage business, which had about 599,000 members and generated $7.9 billion in revenue in 2022. Despite previously considering an acquisition of Humana, Cigna is now focusing on selling its Medicare business and plans to pursue smaller acquisitions. Medicare Advantage is a growing sector in the managed-care industry, with about half of Medicare beneficiaries enrolled in these plans. [Extracted from the article]

Cigna and Humana, two major health-insurance companies, are in talks for a potential merger that could be finalized by the end of the year. The merger would create a company worth around $140 billion and give the combined entity scale to rival UnitedHealth Group and CVS Health. The deal would allow Cigna to expand its presence in the fast-growing Medicare segment, while Humana could help accelerate Cigna's move towards value-based care. Antitrust concerns and the Biden administration's scrutiny of health-industry consolidation may impact the merger. [Extracted from the article]

According to a survey by KFF, the cost of employer health insurance in the US has risen by 7% this year, the largest increase since 2011. The average cost of a family plan is now nearly $24,000, with workers paying an average of $6,575. The increase in health insurance costs is attributed to inflation in the broader economy, which has led to higher fees negotiated by hospitals with insurers. However, deductibles have remained steady, and most insurance plans still provide access to a wide range of doctors and hospitals. The survey also found that coverage for abortion is limited, with larger companies more likely to cover it under certain circumstances. [Extracted from the article]

Walgreens Boots Alliance has announced that Tim Wentworth will be its new chief executive. Wentworth, a healthcare veteran and former CEO of Express Scripts, will take on the role as the pharmacy chain faces profit pressures and labor challenges. Walgreens recently warned of lower earnings per share and has been dealing with staffing issues. Wentworth's experience in the healthcare industry, particularly with pharmacy-benefit managers, may help him navigate these challenges. [Extracted from the article]

The company has raised its own prices to cover mounting costs including healthcare, he said, but if it isn't able to do so in the future, he might be forced to increase workers' out-of-pocket costs for care. Keywords: wsjhealth; kwexclusive; Insurance; Non-life Insurance; Health/Medical Insurance; Financial Services; Labor/Personnel; Corporate/Industrial News; Workers Pay; Political/General News EN wsjhealth kwexclusive Insurance Non-life Insurance Health/Medical Insurance Financial Services Labor/Personnel Corporate/Industrial News Workers Pay Political/General News N.PAG N.PAG 1 09/11/23 20230908 NES 230908 Employers and workers are expected to see an increase of about 6.5% or higher in health-plan costs next year Health-insurance costs are climbing at the steepest rate in years, with some projecting the biggest increase in more than a decade will wallop businesses and their workers in 2024. [Extracted from the article]

Some doctors and patients also complain that health insurers use the process to deny valid care. Keywords: wsjhealth; kwexclusive; Insurance; Non-life Insurance; Health/Medical Insurance; Healthcare/Life Sciences; Financial Services; Health Maintenance Organizations; Private Health Insurance; Political/General News EN wsjhealth kwexclusive Insurance Non-life Insurance Health/Medical Insurance Healthcare/Life Sciences Financial Services Health Maintenance Organizations Private Health Insurance Political/General News N.PAG N.PAG 1 04/03/23 20230330 NES 230330 UnitedHealthcare, Cigna and Aetna move to revamp prior-authorization programs The paperwork required by health insurers to get many medical procedures or tests - one of the biggest gripes of doctors and patients - is getting rolled back. [Extracted from the article]

Even with the discount, some of the heart hospital prices were in the top third of what the hospital charged patients with insurance for some services. It would cost an uninsured patient $884 at any of the three Baptist Memorial Health Care hospitals; $1,480 at Regional Medical Center; $2,653 at Saint Francis Hospital-Memphis; and $2,938 at Saint Francis Hospital-Bartlett. All hospitals reporting data charge $39,945 Franklin, Ohio Note: Includes hospitals reporting a cash price and at least one price negotiated with an insurer, and counties with four or more hospitals reporting prices. [Extracted from the article]